FICA is our most regressive federal tax.
The FICA tax is only levied upon employment derived incomes, (i.e. wages). All wages are incomes, but all incomes are not wages.
Statistically, the legal, (i.e. “on the books”) wages of the working-poor are effectively their entire earned incomes. The proportions of individual's other (than wage) incomes increase as their adjusted gross incomes increase.
The first $127,200 of employees annual wages are subject to 7.65% tax, the remainder are subject to only 1.45% FICA tax. FICA and SECA are our most regressive federal taxes.
An effective general sales tax of 4.55% could more than replace the revenue loss of reducing the 15.3% of payroll based taxes shared by employees and employers to 6.2%.
That would increase tax revenue for funding Social Security and medicare, purchasing powers of employees and their dependents.
The reduction of enterprise's net taxes would reduce USA products price disadvantages to foreign products within and beyond our borders. The price comparison improvement to foreign goods would exceed that of an effectively similar reduction of USA's corporate tax rates.
Taxes ONLY levied upon wages and payrolls should not fund Medicare and they should not fund more than half of Social Security retirement benefits. These programs reduce incidences and extents of poverty. Their net economic and social benefits to our nation should be supported by all rather than only employees and employers.
The FICA tax is only levied upon employment derived incomes, (i.e. wages). All wages are incomes, but all incomes are not wages.
Statistically, the legal, (i.e. “on the books”) wages of the working-poor are effectively their entire earned incomes. The proportions of individual's other (than wage) incomes increase as their adjusted gross incomes increase.
The first $127,200 of employees annual wages are subject to 7.65% tax, the remainder are subject to only 1.45% FICA tax. FICA and SECA are our most regressive federal taxes.
An effective general sales tax of 4.55% could more than replace the revenue loss of reducing the 15.3% of payroll based taxes shared by employees and employers to 6.2%.
That would increase tax revenue for funding Social Security and medicare, purchasing powers of employees and their dependents.
The reduction of enterprise's net taxes would reduce USA products price disadvantages to foreign products within and beyond our borders. The price comparison improvement to foreign goods would exceed that of an effectively similar reduction of USA's corporate tax rates.
Taxes ONLY levied upon wages and payrolls should not fund Medicare and they should not fund more than half of Social Security retirement benefits. These programs reduce incidences and extents of poverty. Their net economic and social benefits to our nation should be supported by all rather than only employees and employers.
